GYANSHREE SCHOOL

ACADEMIC SESSION: 2019-20

BUSNINESS STUDIES
INTERNATIONAL BUSINESS (CASE STUDIES)
GRADE –XI
__________________________________________________________________________________________________

CASE STUDY 1
International business has entered into a new era of reforms. India too did not remain cut-off from these
developments. India was under a severe debt trap and was facing crippling Balance of Payment crisis. In 1991,
it approached the International Monetary Fund (IMF) for raising funds to tide over its Balance of Payments
deficit. IMF agreed to lend money to India subject to the condition that India would undergo structural changes
to be able to ensure repayment of borrowed funds. India had no alternative but to agree to the proposal. It was
the very conditions proposed by IMF which more or less forced India to liberalize its economic policies. Since
then a fairly large amount of liberalization at the economic front has taken place. Though the process or reforms
has somewhat slowed down, India is very much on the path to globalization and integrating with the world
economy. While on one hand, many Multinational; Corporations have ventured into Indian market for selling
their products and services, many Indian companies too have stepped out of the country to market their products
and services to consumers in foreign countries.
On the basis of the above case, answer the following questions:
1. What is the meaning of globalization and liberalization?
2. IMF forced India to make structural changes so that international trade is encouraged. Do you think that
encouraging international trade is good for the country? Give reasons to support the answer.
CASE STUDY 2
Tourism and transportation have emerged as major components of international trade in services. Most of the
airlines, shipping companies, travel agencies and hotels get their major share of revenues from their overseas
customers and operations abroad. Several countries have come to heavily depend on services as an important
source of foreign exchange earnings and employment. India, for example, earns a sizable amount of foreign
exchange from export of services related to travel and tourism.
When one country provides services to other country and in the process earns foreign exchange, this is also
treated as a form of international business activity. Fee received for services like banking, insurance, rentals,
engineering and management services form part of country’s foreign exchange earnings. The other examples of
such services include overseas management contracts where arrangements are made by one company of a
country which provides personnel to perform general or specialized management functions for another company
in a foreign country in lieu of the other country.
On the basis of the above case, answer the following questions:
1. Is international trade related to to only goods?
2. Enumerate the different services which are traded internationally.